RealTime IT News

Intel's Japanese Offices Raided

Intel is under investigation by Japan's Fair Trade Commission for its business practices in the area, the chipmaking company confirmed Friday.

Investigators took documents in an unannounced visit from three offices in Tokyo Thursday. The government agency was not specific about its intent, but published reports suggest it wants to know if the chipmaking giant pressured PC manufacturers into using only Intel products.

Intel legal council Chuck Mulloy said the Santa Clara, Calif.-based company is cooperating with the investigation.

"We don't have a clear indication from them about what this is about," Mulloy said.

Intel is the dominant player when it comes to powering PCs. According to recent reports from IDC, more than 80 percent of personal computers worldwide run on Intel chips. In Japan, that number runs up to about 85 percent of all PCs shipped to the country.

AMD is the second largest chipmaker with 16.8 percent of the market share. Taiwan-based Via Technologies and Transmeta round out the top four.

IDC Analyst Roger Kay told internetnews.com the investigation should have very little impact if at all on Intel's sales in Japan. According to SEC filings, Intel made $2.66 billion in sales in Japan last year, or about 9 percent of its total revenue.

"This will settle out pretty quickly," he said suggesting that the investigation could be partly retaliation against U.S.-based companies. Similar inquiries by the commission into the business practices of Intel rivals AMD and Transmeta, have also been reported.

The Fair Trade Commission's action against Intel is similar to a raid on Microsoft offices in Tokyo back in February 2004. Investigators looked at whether the Redmond, Wash.-based software vendor's licensing of Windows XP violated the country's anti-monopoly law.

Shares of Intel stock dropped 25 cents, or 0.91 percent, to close at $27.37 on Thursday. The U.S. markets were closed on Friday for the Easter and Passover weekend. Intel is expected to report its quarterly earnings on Tuesday, April 13.